Key information for local businesses and charities
As we approach the end of the year, it’s a good time to look ahead and prepare for some key changes coming in 2026 that could affect how you manage your finances and company records.
Making Tax Digital for Income Tax
The government’s Making Tax Digital (MTD) programme is expanding and it could affect how you report your income to HMRC.
From April 2026, most individuals with income over £50,000 from self-employment or property will need to use compatible software to keep digital records and submit updates to HMRC every quarter. A year later, in April 2027, the threshold will drop to £30,000.
This is a significant shift from the current system of submitting a Self Assessment tax return once a year. Under MTD for Income Tax, you’ll need to:
- Keep digital records of income and expenses
- Submit quarterly updates via approved software (e.g. Xero, QuickBooks, FreeAgent)
- Provide an end-of-year summary and final declaration
If you’re still using spreadsheets or paper records, now is a good time to consider moving to cloud accounting software. Doing so not only ensures compliance but can also make your financial planning smoother and more accurate in the new year.
Companies House ID verification
There are also changes underway for limited and charitable companies.
To improve transparency and reduce fraud, from 18th November 2025 Companies House has mandated that identities are verified for:
- Company directors
- People with significant control (PSCs)
This applies to both new appointments and existing roles, meaning everyone affected needs to verify their ID with Companies House, either directly or through an authorised agent such as an accountant.
It’s wise to get underway with this now and consider whether any board changes in the new year need to be planned for.
Look ahead with confidence
These changes are part of a wider effort to improve clarity, build trust, and modernise how organisations report and operate. But they will also bring new responsibilities and some extra admin for businesses and charities.
If you think you may be affected, now is the perfect time to seek advice and get prepared. At Morris Crocker, we’re already helping clients across Portsmouth and the South Coast prepare for Making Tax Digital and the new Companies House requirements.
Contact: mc@morriscrocker.co.uk
You can also find useful guidance on our website: www.morriscrocker.co.uk
As this is the Christmas edition, we’d like to take the opportunity to wish you a restful break and a successful start to the new year.